Marlin Liquidators is considering the purchase of a new $175,000 crane.If Marlin expects the cash inflows to be $45,000 after the first year,$76,000 after the second year,and $80,000 after the third year,what is the NPV if the cost of capital is 15%? Round answer to the nearest whole dollar amount.
A) +$149,196
B) +$26,000
C) +$18,800
D) -$25,801
E) -$18,800

Question

Quizplus · Accepted Answer

NPV = 11ea7fdb_fbe2_ee92_a768_b7553cff8f3a_TB2902_11 11ea7fdb_fbe3_15a3_a768_c17ddfe4a8ee_TB2902_11 - Initial Investment
NPV = 11ea7fdb_fbe3_15a4_a768_6924abc5016a_TB2902_11 + 11ea7fdb_fbe3_15a5_a768_b501b5472863_TB2902_11 + 11ea7fdb_fbe3_15a6_a768_5d2b0a79a010_TB2902_11 - 175,000 = -$25,801.35
Using a financial calculator: CF0 = -175,000, C01 = 45,000, F01 = 1, C02 = 76,000, F02 = 1, C03 = 80,000, F03 = 1, NPV I = 15, CPT NPV = $25,801.35

Marlin Liquidators Is Considering the Purchase of a New $175,000